"Sales of high-performance mobile broadband developed well in North America, Japan and Korea, while other regions such as Europe including Russia, parts of Middle East and India were weaker," Chief Executive Hans Vestberg said.

Net profit was 8.95 billion Swedish kronor ($1.32 billion), boosted by a SEK7.7 billion gain from the sale of its 50% stake in Sony Ericsson, its former handset joint venture with Sony Corp.
SNE, +1.52%
Net profit in the year earlier period was SEK4.1 billion.

Operating profit, excluding the Sony Ericsson sale, fell to SEK2.8 billion from SEK6.3 billion a year ago while revenue fell slightly to SEK50.97 billion from SEK52.97 billion the same quarter last year.

Ericsson has been benefiting from increased mobile data traffic--a result of booming sales of data-hungry smartphones--but revenue growth has slowed as operators rein in spending on costly wireless networks amid the economic uncertainty.

Ericsson's closely-watched gross margin fell to 33.3%, from 38.5% a year earlier, a result of the company having entered into a large number of low-margin network upgrade contracts in Europe which Ericsson hopes will become more profitable in the future.

Ericsson entered the contracts as a way to regain market share in Europe, and figures disclosed in February showed that the company has increased its share of the mobile network infrastructure market to 38% by late last year, from 32% in May, although the gain has come at the expense of its profitability.

North American sales fell 3% on the year in the first quarter, continuing to be dragged down by lower sales to the U.S. CDMA network, a radio communication standard common in the country, as carriers shift toward the next-generation long-term-evolution standard. However, Ericsson said HSPA capacity sales and a continued build-out of 4G coverage more than offset the major decline in CDMA sales.

Ericsson shares closed Tuesday at SEK63.60, valuing the company at SEK208.19 billion.

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